Our Approach: Sharing Values

Symrise helps meet basic human needs for health and nutrition as well as care and well-being with its business activities. The sustainable orientation of our products and processes is simply a matter of course for us and is a quality standard that we pursue constantly. With great in­novative strength, our employees fulfill the company’s promise of “always inspiring more…” day after day, thus supporting the sustainable development of the company and its social environment. Along the way, we are constantly seeking out approaches and solutions along the entire value chain, from the raw material suppliers to the end consumers, that benefit everyone. We call this approach “Sharing Values.”

Cooperative Ways and Solutions

Sustainability as a Competitive Advantage

Our corporate strategy is systematically oriented towards sustainable growth. For us, this includes the permanent and robust expansion of our business that considers ecological and social conditions, works towards an increasingly efficient production and maintains a portfolio that helps meet the basic needs of a growing world population. To achieve this, we formulate goals along the entire value chain. For instance, we continually promote backward integration in the supply chain in order to ensure the long-term supply of raw materials. The strengthened cooperation with upstream stages of the value chain carries a substantial advantage for Symrise as it results in direct access to raw materials. Particularly with the acquisition of the Diana Group, we once again substantially strengthened our access to sustainably produced, natural raw materials last year. At the same time, producers, consumers and the environment benefit from this approach as well. With our pioneering work, for example with vanilla, we create new synergies between all stakeholders. We are convinced that an expanded view like this, one that goes beyond narrow corporate limits, helps to secure our growth and to increase our efficiency while also enabling us to further develop our innovative and sustainable product portfolio.

Our Sustainability Agenda

We began further refining our sustainability agenda in 2014 to firmly anchor sustainability in all processes within the framework of our integrated corporate strategy. We defined four pillars into which we pool our operational sustainability activities with a view to our core business:

Our Sustainability Agenda

SourcingMaximize the sustainability of our supply chain and raw materials

CareImprove well-being in our stakeholder communities

Footprint:

We minimize our environmental footprint along the entire value chain. In doing so, we contribute to conserving resources and lowering environmental impact on the one hand while performing active risk management on the other. We also save on costs by increasing efficiency.

Innovation:

We maximize the social and environmental added value of our products. With a constant focus on sustainability criteria in product development, we create resource-conserving and business-­enhancing effects not only within our own value chain, but that can also positively influence ­consumer behavior.

Sourcing:

We develop the sourcing of our raw materials and their supply chains sustainably. The focus is on a long-term, stable supply of high-quality raw materials as much as the greatest possible transparency and oversight of environmental and social impacts.

Care:

We create lasting value for our employees and our local communities. Along with strengthening the infrastructure and sense of community, we gain new talents and increase motivation among our employees.

We have accordingly operationalized the pillars for our various business units in consideration of the different challenges and specific business requirements each unit faces. Both of our segments, Scent & Care and Flavor & Nutrition, have thus each developed their own approaches, tailoring them to the challenges and opportunities unique to their work.

Comprehensive Value System

Shared values are the basis for Symrise’s sustained success. Excellence, creativity and commitment are our keys for outstanding performance and innovative products. We closely link our economic goals with the daily responsibility for the environment, employees and society. Only when our interactions with each other are rooted in integrity can we create lasting added value for all. As a result, our values pave the path for us to become the most successful company in our industry in the long term and help us to inseparably combine business success, sustainable corporate governance and social acceptance with each other.

The Symrise Sustainability Board is responsible Group-wide for sustainability management. It is a global and cross-segment committee whose task is to integrate sustainability continuously in our core processes and determine the sustainability goals that will be implemented in the ­divisions. Since 2013, some of these sustainability goals have been integrated into the individual performance targets for all managers. Items such as the reduction of our CO2 emissions (Scope 1 and 2), the sustainable orientation of our innovation process or the sourcing of raw material from sustainable sources are rewarded. The Sustainability Board comes together several times per year to ensure that sustainability-relevant topics and the concerns of our important stakeholder groups are considered along the entire value chain. Together with the representatives from the Corporate Compliance and Corporate Communications departments, the sustainability officers from the two segments Flavor & Nutrition and Scent & Care comprise the Sustainability Core Team, which is responsible for the operational management of the sustainability agenda. The team reports directly to the CEO of Symrise AG every quarter. Addition­ally, a global network of voluntary sustainability ambassadors actively raises awareness for our sustainability agenda: “care teams” contribute to a deeper integration of sustainability into our daily actions by implementing targeted initiatives locally at all of the company’s regional headquarters as well as numerous other international sites. It is our declared goal to have every single employee acting as a sustainability ambassador, aware of their individual role and potential contribution. As part of our workshop “Next Level Sustainability,” 100 participants from all business units developed a common understanding for responsible business operations and their daily implementation in the workplace at Symrise. With this, we further develop our vision of a sustainable future – within Symrise and beyond.

Sustainability objectives are an integral part of individual objectives.

Organization of Sustainability Management

Our Central Topics: Materiality Analysis

The Sustainability Board plays a crucial role when it comes to the development and structure
of our integrated corporate strategy. In 2014, it led a review of the strategic orientation of our sustainability commitments. Within this framework, our fields of action were revised and compared with new developments and requirements, such as the GRI G4 directive regarding our reporting. Based on our “Sharing Values” approach, we have revised our fields of action, assessed them according to their “value for society” and “value for Symrise” and identified topics with the greatest potential for shared value creation.

At the same time, the priorities of our main stakeholders were recorded as part of our stakeholder management, which is oriented towards the AA1000 Stakeholder Engagement Standard, and compared this with our strategic fields of action. As part of a global online survey, Symrise employees from the divisions and central positions that are in direct contact with our stakeholders identified the respective relevance of the fields of action for the stakeholders. This was supplemented by in-depth interviews with select representatives that evaluated the form and intensity of our stakeholder contacts. The results of the materiality analysis were validated as part of a Sustainability Board meeting where every division was represented and subsequently approved by the Executive Board.

The materiality analysis also serves as a basis for structuring our reporting pursuant to the GRI G4 guidelines: We provide a full record on topics that were viewed as having a higher value for both Symrise and society. On topics that only have a high relevance in one dimension, we disclose at least one indicator. We provide comprehensive, transparent information on our sustainability activities and key figures in our sustainability record.

The concept of “Sharing Values” is a primary guiding principle for our business: We create value for all parties by integrating the interests of our stakeholders at every level of the corporate value chain. Our materiality analysis helps us to identify the topics with the greatest potential for shared value creation. On the following pages, we present our respective approaches and central goals.

Goal: Leader in Sustainable Products

Every one of the nearly 30,000 different Symrise products is subject to strict sustainability ­requirements. We develop individual sustainability concepts for every strategic product group – a standard that stands out in our industry. We concentrate our research and development ­activities particularly on the creation of products that contribute to satisfying basic human needs. We want to continually increase the share of products that make a contribution to health and well-being. Here the focus is on green chemistry, natural raw materials and re­source-­efficient production processes along with ­innovative technologies. Our goal is to ­replace petroleum-based materials as far as possible with renewable materials, for example via blue or white biotechnology. For raw ­materials where this is not possible, we are working on methods for minimizing the share of petroleum ­derivatives.

Diana is also making a sustainable contribution with innovative products: For instance with functional hydrolysates, which reduce the need for fish food in aquacultures by up to three-­quarters. This helps in the fight against over-fishing.

Natural raw materials already account for more than half of our portfolio and their share is constantly increasing. A complete conversion to natural raw materials, however, would result in complex social and environmental effects in many cases: A greater use of natural raw materials often leads to increased competition for land used for food production and can endanger the preservation of biodiversity due to the development of monocultures. Synthetic raw materials also often take less energy to manufacture than the energy required to cultivate, harvest and transport natural ones.

It is therefore not our objective to switch entirely to naturally occurring raw materials. Our focus is more on further reducing our dependence on finite raw materials. We have therefore made the identification of alternative means of generating raw materials the focal point of our research. We strive to find the most sustainable solution for each product while considering its entire life cycle. Throughout this, we take a strict open innovation approach and depend on our close cooperations with non-governmental organizations, research institutions and business partners.

Highest Product Standards

Our product safety policies and good manufacturing practice (GMP), meaning compliance with clear global guidelines on quality assurance of production processes and the production environment, is the basis of responsible behavior with products and manufacturing processes. Depending on the product group, Symrise orients itself towards various legal requirements and standards:

Flavors:

We abide by the generally accepted requirements and auditing standards of the Global Food Safety Initiative (GFSI) and other locally recognized standards aimed at ensuring a continual improvement in performance. In 2014, more than 90 % of our product volume was manufactured at locations certified in accordance with internationally recognized food safety management systems. By 2015 we will have all of our production sites in the Flavor & Nutrition segment certified to GFSI-recognized standards.

Pharmaceutical Agents and Additives:

At Symrise, active pharmaceutical ingredients (API) that are produced for pharmaceutical end products comply with the good manufacturing practice (GMP) rules of the applicable law on pharmaceuticals. Pharmaceutical additives are materials that are used in pharmaceutical end products but do not have an active effect. There are currently no binding regulations for pharmaceutical additives.

Cosmetic Active Ingredients and Raw Materials:

Symrise manufactures the majority of its cosmetic active ingredients and raw materials according to the BRC Standard for Consumer Products. Symrise’s Scent & Care product safety policy is an essential part of the Integrated Management System. In addition, Symrise conducts risk analyses and works with an HACCP (Hazard Analysis and Critical Control Points) system.

Ensuring Utmost Product Safety

Responsible Sourcing

We use approximately 10,000 natural and synthetic raw materials from over 100 countries to manufacture our products. We meet the differing expectations of our stakeholders and the large number of practical challenges with our Responsible Sourcing Model, which focuses on increasing backward integration in our value chain processes among others. The goal of this model is to secure our supplies of raw materials for the long-term by focusing on a continuous, close cooperation with our suppliers, on local social and ecological commitments and on stra­tegic partnerships with our key customers. As part of our successful strategy of backward in­tegration, we also consider the local availability of the raw materials used most frequently at a site when selecting locations for our international production sites. Our vanilla commitment in Madagascar underscores this, as does the promotion of sustainable development in the French lavender and lavandin oil industry. Another example is the cooperation with carrot farmers in France, with whom Diana has developed particularly long-term crop rotations in ­order to minimize soil damage.

With this approach, we are not only securing our supply of raw materials but also contributing to local value creation in the respective regions and can guarantee top quality with maximum traceability. During the year under review, we spent 73 % of our procurement budget on suppliers based in domestic and bordering regions of our main corporate locations. Our transport-­related emissions are also greatly reduced thanks to backward integration. Our shining example for this is the onion, which is one of our key raw materials, used in about 6.2 % of all Symrise products. Symrise purchases the vegetable from the surrounding vicinity, making long-term agreements with suppliers while minimizing transport, storage and energy costs.

The Symrise Onion – An Example of Efficiency and Traceability

Sustainable Supplier Management

Independent of the source, we place a high value on a sustainable, efficient handling of raw materials – internally and by our suppliers. With the help of a systematic management approach, we ensure that suppliers meet our standards: As part of this, new suppliers must provide information on quality, product safety and environmental aspects as well as on their sustainability programs, social responsibility guidelines within their supply chains and compliance with ethical standards. A truthful answer to this supplier acceptance questionnaire is the non-negotiable basis for Symrise entering into a business relationship. Standards such as the safeguarding of basic human rights or the basic principles of the International Labor Organization (ILO) are part of our Group-wide risk management system. As part of this, we carry out systematic risk and performance assessments of all suppliers on the basis of economic, ecological and social aspects.

We carry out audits for suppliers posing an especially notable risk, crucial raw materials or regarding problems that have come to light in the assessment. The focal points of these audits are product safety, quality management, health and safety at work, the environment and social responsibility. If suppliers don’t meet our defined standards, we jointly de­velop and implement improvement measures. If these standards are still not upheld after such attempts, the business relationship is terminated.

Supplier Rating Based on SEDEX Criteria

The international platform of the Supplier Ethical Data Exchange (SEDEX) is a valuable tool with which we can more easily assess suppliers and deliver our own data to customers. Since 2006, we publish information on working conditions and employee rights, health and safety as well as on environmental and ethical business practices via this platform. Every Symrise production site has been SEDEX registered. Since 2012, we have also invited 250 of our most important suppliers to register with SEDEX and to disclose their data to us. This means that we can evalu­ate more than 70 % of our purchasing volume on compliance with sustainability criteria. Diana suppliers will be included from 2015.

Observance of Human Rights

Resource-conserving Production

As part of an industry that uses a great deal of energy and resources, investing in technologies and processes that conserve resources is one of the most important measures Symrise can take to sustainably increase the company’s value. Our investments are therefore closely linked to process efficiency and the associated long-term cost savings. A good example of this is our construction of a high-efficiency cogeneration plant in Holzminden.

We have set ambitious goals to continually optimize our environmental footprint: Since 2006, we have allowed the independent investor initiative CDP to review our CO2 emissions. In 2014, Symrise was recognized as a leading company in the energy and raw materials sector of the MDAX® – scoring 96 out of 100 points on the Carbon Disclosure Leadership Index. CDP certified that we factor ecological risks and opportunities into our core business and informs external stakeholders about this in a comprehensive and transparent manner. We have also been recording our indirect emissions according to Scope 3 of the GHG Protocol since 2011. We are currently recording all of our key Scope 3 emissions. With roughly 90 %, upstream production of raw materials represents the largest share by far.

A comprehensive analysis of our own processes and their impact on the environment is the most important prerequisite for successful environmental management. Organizationally, this is pooled in our subsidiary TESIUM, which focuses on environmental, safety and energy aspects over the entire lifecycle of plants and facilities. Another important tool for this is Total Productive Maintenance (TPM): Symrise employees work in 25 cross-hierarchical teams with over 52 TPM coordinators to develop solutions and put them into practice. Since 2007, we have implemented nearly 3,000 improvements and have been able to meet our goal of increasing ­efficiency each year.

Together with our customers, we have also established an integrated supply chain management system in the form of the Symchronize™ initiative, which comprises the entire value creation chain from raw materials procurement to the customer’s end product. With this, we identify appropriate starting points and potentials for reducing our energy, water and resource consumption as well as our emissions. To achieve utmost resource efficiency, we are also developing our own technologies, such as the patented SymTrap® procedure. This procedure allows us to fully extract flavor-active components from the side streams of raw material processing – thereby achieving a maximum and simultaneously energy-saving resource yield.

Around the world, our environmental management is based on the ISO 14001 standard. Over 70 % of our sales volume is produced at sites with ISO 14001 certification. The Corporate Compliance unit coordinates our global environmental management. Together with the business divisions involved, it develops guidelines and procedural instructions from the global principles defined by the Executive Board and assesses compliance with legal requirements and obligations.

Biodiversity

The biodiversity of nature makes it an irreplaceable source of natural raw materials and inspiration for new flavors and fragrances as well as for functional and active ingredients. Conserving that biodiversity is therefore in the best interests of our industry. To answer industry-specific questions about the effects of our activities on biodiversity, we participated in a Biodiversity Check performed by the Global Nature Fund in 2011 and 2012. We adopted the necessary actions that were identified and developed a corresponding concept for biodiversity. It is based on three pillars: The sustainable sourcing of natural raw materials, the eco-conscious design of Symrise’s sites and raising awareness among employees on conserving biodiversity. Regarding operational implementation, we launched a strategic partnership with the Global Nature Fund (GNF) and the Union for Ethical BioTrade (UEBT) in 2014. The goal here, in addition to enacting measures for an eco-conscious design of our site in Holzminden and a detailed analysis of our supply chains, is in particular to identify concrete business benefits via a comprehensive bio­diversity management system.

Biodiversity

Diversity

The diversity of our employees enriches Symrise, thanks to the various viewpoints, cultural influences and experiences. For us, diversity is not simply a matter of tolerance. Differing opinions, multi-cultural diversity and various constellations of coexisting are essential sources of inspiration, creativity and ideas. We rely on this diversity and its integration into our structures for sustainable business success. This is the only way we can fulfill our “Sharing Values” approach.

In order to promote this potential, we hold fast to the motto of: equal opportunity for equal qualifications. Our employees should have equal opportunity regardless of their gender, sexual identity, age, nationality, religion or disabilities. The majority of our employees and managers hail from the respective country of Symrise’s sites. At the same time, we promote intercultural diversity with targeted personnel development measures. Also among our diversity efforts is having a balanced proportion of women. At the global level, 38 % of Symrise employees (including Diana) are female.

Diversity &Equal Opportunity

Transparent Reporting

The sustainability record from Symrise revolves around the G4 guidelines that were laid down
by the Global Reporting Initiative (GRI) and revised in 2013. Along with the standard general disclosures, it includes various indicators along a variety of generic GRI aspects for reporting on economic, social and environmental issues. The selection of which aspects will be reported on is the responsibility of the respective company in consideration of the basic principles of the GRI in terms of report content and quality. The basis for the focus of our report was the materiality analysis carried out in 2014, where we prioritized our strategic fields for action (see p. 60/61). On topics that were assigned a high priority level, we report fully (GRI option “Comprehensive”); on topics with a less important materiality, we report on at least one indicator (GRI option “Core”).

Symrise follows a sustainable business model with its “Sharing Values” approach. This is expressed in our corporate strategy as well as our corporate values while playing a decisive role in the design of products and proc­esses. The progressive integration of sustainability and business is also reflected in our combined ­reporting. For the first time, we have subjected our sustainability information to an external assurance review pursuant to the AA1000 Assurance Standard. The review assesses all quantitative and qualitative sustain­ability information.

In our sustainability reporting, we follow the G4 guidelines of the Global Reporting Initiative (GRI) “In accordance – Comprehensive.” This means that we are fully accountable on all essential topics. The process and the result of our materiality analysis, our strategic sustainability agenda and our prin­ciples are described in the following chapter. All quantitative and qualitative information has been made available at cr2014.symrise.com/sustainability. We also meet the requirements for a Communication on Progress within the framework of the UN Global Compact, the world’s largest voluntary initiative on corporate responsibility.

AA1000 AS

All quantitative and qualitative sustainability ­information has been tested and externally ­verified in accordance with the internationally rec­ognized standard AA1000 AS. The respec­tive certification can be found at here